PARTICIPATIVE STRATEGIC PLANNING AND INNOVATION CAPABILITY: MODERATING ROLE OF IDEATION STRATEGY

Abstract

Enriching the limited knowledge and research on linkage between strategic management, human resource and innovation in developing economies, this paper focuses on the role of participative strategic planning (PSP), promotion focus and flexible role orientation (FRO) on innovation capability in Iranian SMEs. Furthermore, the moderating role of ideation strategy will be investigated. A total of 252 samples were collected from Iranian SME managers and employees in the different sectors through a quantitative method. A questionnaire was used for the data collection, and AMOS-SEM was employed for data analysis. The results indicate that PSP has a positive and significant impact on promotion focus, FRO, and innovation capability. In addition, it is shown that ideation strategy moderates the impact of promotion focus and FRO on innovation capabilities. Given the positive impact of PSP on promotion focus, FRO, and innovation capability, it is suggested that SME’s top managers use staff and managers with different levels in strategic planning processes and long-term organisation goals.